55 N.W. 733 | N.D. | 1893
The contest before us is between the defendant, Sullivan, and the intervener, Voss. The action is upon an undertaking executed by defendant, Sullivan, to plaintiff, Clark, as surety for one Mead, against whom Clark had recovered judgment before a justice of the peace. From this judgment, Mead appealed to the District Court, and on this appeal the undertaking sued upon was executed by Sullivan, as surety for Mead. In this undertaking, Sullivan, in substance,' agreed that he would pay the
As a counterclaim to the plaintiff’s cause of action, defendant, Sullivan, interposed a judgment recovered against plaintiff, Clark, in favor of Fairbanks, Morse & Co., which judgment was assigned to Sullivan before the commencement of this action. That such judgment constitutes a valid counterclaim, as against Clark, cannot be disputed. Wells v. Henshaw, 3 Bosw. 625; Clark v. Story, 29 Barb. 295; Pom. Rem. & Rem. Rights,-§ 799. But the intervener, Voss, who was allowed to serve a complaint in intervention, insists that the judgment can be interposed as a counterclaim against plaintiff’s cause of action on the undertaking only to the extent of plaintiff’s interest in that cause of action, after deducting therefrom the amount of an alleged attorney’s lien which he (Voss) insists he had upon the plaintiff’s cause of action against Sullivan, and upon the undertaking at the time Sullivan purchased the judgment against Clark. Had the attorney such a lien? And, if so, what is the nature of that lien? These are the questions which it is important for us to determine.
The attorney’s claim to a lien grows out of the following fact: Mr. Voss was attorney for Clark in the action against Mead. In that action he rendered services for Clark in both courts, worth the sum of $45. After the recovery of the judgment against Mead in the District Court, Mr. Voss entered his notice of lien to the sum of $45 in the judgment docket, opposite to the entry of the judgment. Under our statute, this gave him a lien, but what did it give him a lien upon?' The language of our statute leaves no room for construction upon this point. The statute, so far as it is material to this inquiry, provides as follows: “An attorney has a lien for a general balance of compensation in and for each case upon: * * * Third. Money due his client, in the hands of the adverse party, or attorney for such party, in an action or
What were the rights of the intervener with respect to this undertaking, and the cause of action thereon against Sullivan? We are clear that he had all the rights with regard to this instrument that he had with respect to the judgment against Mead in favor of the plaintiff.' This undertaking was executed by Sullivan in the very case in which the judgment was rendered, and in the undertaking Sullivan promised to pay any judgment which the District Court might render in the case. The undertaking is but an additional security, provided for by the law, for the payment of the money due from Mead to the plaintiff. The lien which attaches to the money must necessarily attach to the undertaking. The money which Sullivan is to pay under this undertaking is the money which the attorney has secured for his client by the labor he has bestowed upon the original case. Nor is authority wanting to support our views. Newbert v. Cunningham, 50 Me. 231; Hobson v. Watson. 34 Me. 20; Martin v. Hawks, 15 Johns. 405; Wilkins v. Batterman, 4 Barb. 48. The reasoning upon which these cases rest is that the rights of an attorney, under his lien, are those of an equitable assignee of the judgment, to the extent of his lien. Under our statute he would be the equitable assignee of the money due from the debtor to the creditor. Of course, as such assignee, he would have the same interest in any undertaking or cause of action which the creditor, his client, might have, as security for the payment of such money. The
That the rights of the attorney, under his lien, are those of an equitable assignee, is supported by many decisions, and is sound on principle. Warfield v. Campbell, 38 Ala. 527, 534; Ely v. Cooke, 28 N. Y. 365; Perry v. Chester, 53 N. Y. 240; Marshall v. Meech, 51 N. Y. 140; Rooney v. Railroad Co., 18 N. Y. 368. The intervener therefore became an equitable assignee of this undertaking, to the extent of $45, his bill for services, several days before the defendant, Sullivan, had secured the right to set off the judgment against Clark. He (Sullivan) did not purchase this judgment until about a week after the intervener entered notice of his lien upon the judgment docket. But unless Sullivan had notice of this equitable assignment at the time he bought the judgment against Clark, his right to set off such judgment against his liability on the undertaking cannot be defeated by such assignment. Section 4871, Comp. Laws, provides: “In the case of an assignment of a thing in action, the action by the assignee shall be without prejudice to any set off or other defense existing at the time of, or before notice of, the assignment; but this section shall not apply to negotiable promissory note or bill of exchange, transferred in good faith, and upon good consideration, before due.” Under the terms of this section the right to set off a claim
That defendant, Sullivan, had actual notice of the equitable assignment of the cause of action against him on the undertaking to Voss before he (Sullivan) purchased the set off, is not pretended. It only remains to be considered whether the entry of the lien in the judgment docket constituted notice to him. When we examine the statute, we find that it limits to the judgment debtor the effect of this entry as notice. It says that by this entry the lien is made effective against the judgment debtor. It is apparent that the statute does not mean that anylien is created against the judgment debtor,'or against his property, but merely' that the entry of the notice constitutes notice to him, so that he cannot thereafter disregard the interests of the attorney in the moneys which he (the debtor) owes the client The legislature has so restricted the operation of this entry of notice that only the judgment debtor is affected by it. His surety, on an appeal undertaking is not within the statute. The attorney can protect himself by giving such surety actual notice of his lien, and from that moment the surety pays the client, or purchases a set off against him, subject to the attorney’s rights. The case of Hroch v. Aultman & Taylor Co., (S. D.) 54 N. W. Rep. 269, has been cited to support the priority of the attorney in the case. But in that case the right of set off was held by the court not to be absolute, as in the case at bar. Here the defendant is' relying upon a legal set off which he purchased against the plaintiff’s cause of action against him, without notice that an equitable assignment of the. defendants claim had been made to the “attorney, whereas in that case the court was dealing with the question
Note — For right of offset by surely, see Clark v. Sullivan, 2 N. D. 103.